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The long tail is really profitable
August 21, 2005
Chris Anderson’s big idea in “The Long Tail”, is that the niches can be bigger than hits. His thinking is getting broad coverage because it suggests the fundamental disruption of the classic business model.
His latest blog posting highlights an important benefit of the LT, profit!
Chris suggests that online, the traditional model for retail can be revised.
Under the old “bricks and mortar” model, it’s typical for 20% of the inventory to account for 100% of the profits.
In the new “hypothetical” model, 90% of inventory= 33% of profit, 25% of inventory = 33% of profit and 2% accounting for a whopping 33%.
Chris Anderson will be one of the speakers at Influx’s M-Squared event to be held in San Francisco on September 27th.
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Influx Insights is the blog of BSSP's Influx Strategic Consulting Division. Up and running since 2004, the blog covers branding and the related areas of trends and technology.
